Amazon.com Inc. shares rose more than 4 percent on Tuesday after a note Analyst fueled optimism about the company's Kindle e-book business. The ma...

Amazon.com Inc.

shares rose more than 4 percent on Tuesday after a note Analyst fueled optimism about the company’s Kindle e-book business.

The market for e-book is much larger than previously thought, and the owners of the Kindle e-readers and tablets are reading more e-books, Morgan Stanley’s Scott Devitt, a leading Internet and e-commerce analyst told investors in research note. Devitt estimated global sales unit e-book $ 859 million in 2012, a significant increase compared to a previous estimate of 567 million euros. With nearly 45 percent of the e-book market, Amazon probably 383 million e-books sold last year, against a previous estimate of 252 million euros, the analyst added. broader strategy

Amazon is selling mobile devices at or near cost and make money when consumers buy gadgets to digital content, including e-books, music, videos, applications and games.

Devitt said Wednesday that the strategy can work with e-books, one of the oldest categories Amazon Digital. “We initially assumed that the early adopters of eReader devices would be avid readers, and so the marginal buyer read less,” Devitt wrote. However, the data show a recent presentation that Amazon Kindle consumers who purchased in 2011 4.6 times read e-books, on average, within 12 months of purchase gadget compared to 12 months for the unit, the analyst noted . similar data from 2008, shows the consumer reading e-books 2.6 times as many Kindle device after purchase, on average, according to Devitt. The success of Amazon’s Kindle business is important, because it is more cost effective than some of the other activities of the company, said Devitt. Kindle The company, gadgets and tying digital content has generated about 11 percent of sales from Amazon last year and 34 percent of the company’s consolidated segment operating profit or CSOI, Devitt said. The CSOI is a measure of profitability followed closely Amazon. “The Kindle is a free pool profit subsidizes investments in other growth initiatives,” Devitt wrote. shares rose 4.1 percent to Amazon to $ 269.30 in afternoon trading Wednesday.